Solution Manual for
Microeconomics and Behavior
(10th Edition) by Robert Frank |
Chapters 1–18 Complete Step-
by-Step Answers, Study Guide
& Exam Prep Resource 2026
• This exam prep resource covers all 18 chapters of Microeconomics and Behavior
(10th Edition) by Robert Frank, offering carefully crafted multiple-choice
questions with highlighted correct answers and detailed EXPERT RATIONALE to
reinforce understanding.
• Use this material by reading each question independently before checking the
answer — the EXPERT RATIONALE beneath each correct option explains the why,
making it ideal for deep conceptual revision, not just memorization.
MICROECONOMICS AND BEHAVIOR — 10TH EDITION | ROBERT FRANK
Question Multiple Choice Exam | Chapters 1–18
CHAPTER 1: THINKING LIKE AN ECONOMIST
1. Which of the following best describes the concept of opportunity cost?
A) The monetary price paid for a good or service
B) The total cost of producing a good including labor and materials
C) The cost of the next best alternative foregone when making a decision
D) The sunk cost associated with a past decision
E) The average cost of production over all units
, C) The cost of the next best alternative foregone when making a decision
EXPERT RATIONALE: Opportunity cost is a foundational concept in economics referring
to the value of the best alternative sacrificed when a choice is made. It is not limited to
monetary cost but includes any foregone benefit.
2. According to Robert Frank, the economic naturalist approach encourages
students to:
A) Memorize supply and demand curves for all goods
B) Use economic principles to explain everyday observations and behaviors
C) Focus exclusively on mathematical models and formal proofs
D) Analyze government policies using normative economic theory
E) Study historical data to predict future market trends
B) Use economic principles to explain everyday observations and
behaviors
EXPERT RATIONALE: Frank's economic naturalist approach trains students to apply
microeconomic reasoning to real-world phenomena, making abstract principles tangible
through observation of daily life.
3. A rational person will take an action if and only if:
A) The total benefit exceeds the total cost of all previous decisions
B) The marginal benefit of the action exceeds its marginal cost
C) The average benefit exceeds the average cost
D) The sunk cost of the action is zero
E) The action maximizes total social welfare
B) The marginal benefit of the action exceeds its marginal cost
,EXPERT RATIONALE: Rational decision-making is based on comparing marginal
(additional) benefits and marginal costs. An action is worth taking when the extra benefit
gained exceeds the extra cost incurred.
4. Sunk costs are best described as:
A) Costs that increase with every additional unit of output
B) Costs that can be recovered if a decision is reversed
C) Costs that have already been incurred and cannot be recovered
D) Costs that vary with the level of production
E) Costs imposed on third parties not involved in a transaction
C) Costs that have already been incurred and cannot be recovered
EXPERT RATIONALE: Sunk costs are irrelevant to future decision-making because they
cannot be recovered regardless of the action taken. Rational agents should ignore sunk
costs when making decisions.
5. Which of the following is an example of a positive economic statement?
A) The government should increase the minimum wage to reduce poverty
B) Income inequality is morally unacceptable in a just society
C) An increase in the price of gasoline will reduce the quantity demanded
D) Firms ought to prioritize environmental sustainability over profits
E) Workers deserve a living wage regardless of market conditions
C) An increase in the price of gasoline will reduce the quantity demanded
EXPERT RATIONALE: Positive economics deals with factual, testable statements about
how the economy works. Normative statements involve value judgments. Option C is an
objective, testable prediction.
, 6. The cost-benefit principle in microeconomics states that:
A) Governments should subsidize goods whose benefits exceed their costs
B) An individual should take an action only if the total benefits equal total costs
C) An action should be taken only if its benefits are at least as great as its costs
D) Social costs must always be weighed against private benefits
E) Firms maximize profit when cost equals revenue
C) An action should be taken only if its benefits are at least as great as its
costs
EXPERT RATIONALE: The cost-benefit principle is the cornerstone of rational decision-
making in Frank's framework. It requires that the benefits of any action must outweigh
or equal the costs to justify taking it.
7. When economists say that people respond to incentives, they mean:
A) All human behavior is driven purely by financial reward
B) Changes in costs or benefits alter the attractiveness of choices
C) Incentives only matter when monetary payments are involved
D) Governments can always change behavior by taxing or subsidizing
E) People make decisions based solely on emotions
B) Changes in costs or benefits alter the attractiveness of choices
EXPERT RATIONALE: Incentives — whether financial, social, or psychological — affect
the relative costs and benefits of actions, thereby influencing behavior. This is a core
principle of economic reasoning.
8. Which of the following best illustrates the concept of comparative
advantage?
A) A country produces all goods more efficiently than its trading partners
Microeconomics and Behavior
(10th Edition) by Robert Frank |
Chapters 1–18 Complete Step-
by-Step Answers, Study Guide
& Exam Prep Resource 2026
• This exam prep resource covers all 18 chapters of Microeconomics and Behavior
(10th Edition) by Robert Frank, offering carefully crafted multiple-choice
questions with highlighted correct answers and detailed EXPERT RATIONALE to
reinforce understanding.
• Use this material by reading each question independently before checking the
answer — the EXPERT RATIONALE beneath each correct option explains the why,
making it ideal for deep conceptual revision, not just memorization.
MICROECONOMICS AND BEHAVIOR — 10TH EDITION | ROBERT FRANK
Question Multiple Choice Exam | Chapters 1–18
CHAPTER 1: THINKING LIKE AN ECONOMIST
1. Which of the following best describes the concept of opportunity cost?
A) The monetary price paid for a good or service
B) The total cost of producing a good including labor and materials
C) The cost of the next best alternative foregone when making a decision
D) The sunk cost associated with a past decision
E) The average cost of production over all units
, C) The cost of the next best alternative foregone when making a decision
EXPERT RATIONALE: Opportunity cost is a foundational concept in economics referring
to the value of the best alternative sacrificed when a choice is made. It is not limited to
monetary cost but includes any foregone benefit.
2. According to Robert Frank, the economic naturalist approach encourages
students to:
A) Memorize supply and demand curves for all goods
B) Use economic principles to explain everyday observations and behaviors
C) Focus exclusively on mathematical models and formal proofs
D) Analyze government policies using normative economic theory
E) Study historical data to predict future market trends
B) Use economic principles to explain everyday observations and
behaviors
EXPERT RATIONALE: Frank's economic naturalist approach trains students to apply
microeconomic reasoning to real-world phenomena, making abstract principles tangible
through observation of daily life.
3. A rational person will take an action if and only if:
A) The total benefit exceeds the total cost of all previous decisions
B) The marginal benefit of the action exceeds its marginal cost
C) The average benefit exceeds the average cost
D) The sunk cost of the action is zero
E) The action maximizes total social welfare
B) The marginal benefit of the action exceeds its marginal cost
,EXPERT RATIONALE: Rational decision-making is based on comparing marginal
(additional) benefits and marginal costs. An action is worth taking when the extra benefit
gained exceeds the extra cost incurred.
4. Sunk costs are best described as:
A) Costs that increase with every additional unit of output
B) Costs that can be recovered if a decision is reversed
C) Costs that have already been incurred and cannot be recovered
D) Costs that vary with the level of production
E) Costs imposed on third parties not involved in a transaction
C) Costs that have already been incurred and cannot be recovered
EXPERT RATIONALE: Sunk costs are irrelevant to future decision-making because they
cannot be recovered regardless of the action taken. Rational agents should ignore sunk
costs when making decisions.
5. Which of the following is an example of a positive economic statement?
A) The government should increase the minimum wage to reduce poverty
B) Income inequality is morally unacceptable in a just society
C) An increase in the price of gasoline will reduce the quantity demanded
D) Firms ought to prioritize environmental sustainability over profits
E) Workers deserve a living wage regardless of market conditions
C) An increase in the price of gasoline will reduce the quantity demanded
EXPERT RATIONALE: Positive economics deals with factual, testable statements about
how the economy works. Normative statements involve value judgments. Option C is an
objective, testable prediction.
, 6. The cost-benefit principle in microeconomics states that:
A) Governments should subsidize goods whose benefits exceed their costs
B) An individual should take an action only if the total benefits equal total costs
C) An action should be taken only if its benefits are at least as great as its costs
D) Social costs must always be weighed against private benefits
E) Firms maximize profit when cost equals revenue
C) An action should be taken only if its benefits are at least as great as its
costs
EXPERT RATIONALE: The cost-benefit principle is the cornerstone of rational decision-
making in Frank's framework. It requires that the benefits of any action must outweigh
or equal the costs to justify taking it.
7. When economists say that people respond to incentives, they mean:
A) All human behavior is driven purely by financial reward
B) Changes in costs or benefits alter the attractiveness of choices
C) Incentives only matter when monetary payments are involved
D) Governments can always change behavior by taxing or subsidizing
E) People make decisions based solely on emotions
B) Changes in costs or benefits alter the attractiveness of choices
EXPERT RATIONALE: Incentives — whether financial, social, or psychological — affect
the relative costs and benefits of actions, thereby influencing behavior. This is a core
principle of economic reasoning.
8. Which of the following best illustrates the concept of comparative
advantage?
A) A country produces all goods more efficiently than its trading partners
